Mathematical modelling in the wake of the crisis: a blessing or a curse? What does the economics profession say?

The economics profession has been heavily criticised for not anticipating the economic crisis that began in 2007. And even now economists seem unable to suggest ways out of this crisis. It is widely acknowledged that the emphasis of modern economics over the last 50 years has been heavily mathematic...

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Bibliographic Details
Published in:Cambridge journal of economics 2014-03, Vol.38 (2), p.329-347
Main Authors: Bigo, Vinca, Negru, Ioana
Format: Article
Language:English
Subjects:
Behavioral economics
Criticism
Economic crises
Economic crisis
Economic models
Economic research
Economics
Economists
Financial economics
International economics
Macroeconomic modeling
Macroeconomics
Mathematical analysis
Mathematical models
Methodology
Modelling
Political economy
Studies
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Summary:The economics profession has been heavily criticised for not anticipating the economic crisis that began in 2007. And even now economists seem unable to suggest ways out of this crisis. It is widely acknowledged that the emphasis of modern economics over the last 50 years has been heavily mathematical and formalistic. The aim of this paper is to examine whether, in the wake of the crisis, academic economists have examined this emphasis on mathematics and further to investigate the extent to which they are considering changing their methodological orientation. The results of our field study show that many economists have tended to reaf-firm their position and argued for the use of newer, better mathematical models in economics.
ISSN:0309-166X
1464-3545
DOI:10.1093/cje/bet063